Scott Karp of Publishing 2.0 had some interesting comments on the state of online advertising. His thoughts were in response to new research from Jakob Nielsen, where he discusses the ruthless nature of how Web users currently interface with online content.

"As media companies struggle to figure out their digital future, the elephant in the room is that they have only been able to monetize online audiences for pennies on the dollar compared to traditional media. Here’s why: Traditional advertising formats FAIL on the web. By traditional advertising formats, I mean display ads, video ads, and any other ad whose format and value proposition approximates or imitates that of an offline advertising format."

For example, comparing the ad revenue per impression online versus that of print publications will show just how large the discrepancy is. If the same model was used in print, all print publication would be non-existent. Furthermore, users not only have banner blindness, they have banner aversion. As Scott pointed out in Nielsen's research, when users go online, they know what they want, and advertisements are an unwelcome distraction. He concludes his opinion piece with this suggestion for improving the effectiveness and value of online advertising.

"We need to invent new forms of advertising on the web. But it’s more than that. Facebook introduced Beacon as a new form of advertising — but it didn’t create a lot of value for users."

"Online advertising must create value for users or it will create little or no value for advertisers."

"This would seem self-evident, but it has not been the case with traditional advertising, which was developed for CAPTIVE audiences, and web users are increasingly anything but captive."

The response to Scott's articles was met with a lot of different ideas to tackling the the online advertising dilemma. This was my Online PR take on the whole thing:

"I think the future of online advertising – beyond the AdWord/AdSense buyer with intent model – will involve the old school method of clever product placement. The “editorial” won’t be about the product, but the product will still exist within the editorial. The future of modern online advertising will rest in the hands of streamlining the process of integrating product placement with high quality content. In my mind, it won’t be much different than what movies and print publishers do today. It’s just that nobody, except for a few players, have truly created a brokered process that can be easily integrated with mainstream advertisers and generalized publishers (niche blogs, etc…)."